NEWS

In 2009 a Renewable Energy Target (RET) of twenty percent by year 2020 was introduced. Recently, a review of the target determined that the twenty percent target would be exceeded by seven percent prompting the two major political parties to agree to slash the target to what is now termed “the real 20 percent”. Unsurprisingly, feelings amongst the renewable energy sector have been far from positive.

On behalf of the Federal government, Industry Minister Ian Macfarlane and Environment Minister Greg Hunt came to an agreement with Mark Butler and Gary Gray from the Federal opposition to reduce the Renewable Energy Target from 41,000GWh to 33,000GWh – the real 20 percent. This forced an amendment of the Renewable Energy (Electricity) Act 2000 (Cth). Even though it does not appear to be a large reduction, it will still leave behind several billion of renewable energy bound dollars while jeopardising the interest in Australia’s renewable energy sector from private investors due to its volatility and repetitive two-year revisions. 41,000 GWh represents approximately 27%. Greens Environment Spokesperson Larissa Waters questions the move and asks why shouldn’t we be headed in this direction if it means Australia engages and generates more energy through renewable energy methods to generate electricity?

The government’s predication of Australian residents and small businesses demanding more electricity has been proven wrong. Due to conscious, energy-wise decisions, Australians have made the switch to energy efficient appliances. The integration of solar panel systems and battery banks has also proven to reduce the demand of retail electricity, driving up their prices and passing on the differences to customers still connected to the grid in order to maintain the same level of revenue. The world as a whole are well in the midst of moving away from traditional methods of creating electricity i.e. coal fired power generation, fossil fuel power generation. Australia seems to be falling behind as demonstrated at the most recent G20 Summit meeting in Brisbane, November 2014. A European Union Spokesperson described climate negotiations with Australia as being like “trench warfare” and other officials have said it had been “very difficult and protracted,” writes Lenore Taylor. Obama pledged the US would invest $3bil and Japan’s Shinzo Abe pledged $1.5bil.

Additionally, the introduction of the Feed-in Tariffs (FiT) has added to the growing concern of energy retailers, having to pay per kW that’s been fed back into the grid. As reported by Solar Choice on the 15th of August 2014, the current FiT price in NSW is based on the energy retailer’s chosen price. AGL is offering 8c per kWh, Origin Energy is offering 6c per kWh and Energy Australia is offering a measly 5.1c per kWh in comparison to Click Energy’s 10c per kWh. The FiT process currently has no set end-date. The incentive is still there for residents to install solar on their roofs.

Currently, there is an oversupply of electricity in the grid. Minister Ian Macfarlane in an interview on the ABC, “We have 9,000 megawatts hours of excess capacity in electricity generation… We have more than fifteen percent of overcapacity in generation in Australia.” According to the National Electricity Market (NEM) and as published on The Conversation, it is expected to increase to massive amounts in the coming financial years. While demand for electricity keeps deceasing as the trend dictates, many Australians adopt the switch to renewable energy and the amount of excess energy increases too. Therefore, the decrease in the RET all of a sudden seems viable and make sense. However, RET needs to focus more on actually achieving its own target rather than trying to imitate the role of the NEM which is to deal with oversupply of electricity within the grid, argues Alan Pears, a Sustainable Energy & Climate Researcher at RMIT University. The graph above, which appears on The Conversation and compiled by AEMO, estimates the expected oversupply over the coming financial years while demand for electricity simultaneously decreases.

The Australian market contains an over-investment into the energy infrastructure (polls and wires), which is driving energy costs upwards, coupled with an oversupply of electricity in the wholesale market the financial benefits of residential and small business to invest in renewables like solar are proving to be a wise choice. Australia, like the rest of the world needs to redirect investment away from traditional, nationwide infrastructure reliant sources of energy if we are to progress and mature.

Australia needs to maintain and continually exceed the twenty percent limit onwards of 2020. At the moment, it appears as though Australia are taking baby steps to reduce the carbon emissions produced, which are amongst the highest in the modernised world, and will continue to be if this is not rectified. Investment into the RET attracts affluent attention from local and international investors to spend money in the Australian renewable energy industry creating more jobs, removing grid dependence and individuals and small businesses cost of electricity, whilst improving the economy as a whole. More importantly, Australia will investing into their future, by reducing their carbon footprint.